Judgment:
S.M. Daud, J.
1. This petition under Article 226 of the Constitution of India seeks the enforcement of a renewal clause incorporated in an indenture of lease dated 18th March, 1980.
2. Petitioners are the trustees of a private Trust known as Tulsiram Devidayal Property Trust. The land described with sufficient precision in schedule `A' being an annexure to the petition was the subject matter of the lease deed dated 18th March, 1980 which indenture is to be found at Exh. C. The renewal clause appearing therein is worded as follows:-
'Provided always and it is hereby declared that the said Lessor his successors or assigns shall at or before the expiration of the term granted by these present at the request and at the costs of the said Lessees their successors or assigns grant a new or renewed lease of the said lands presses Mill buildings hereditaments and premises hereby demised or any portion of the same to the Lessees their successors and assigns subject to the same conditions contained in these presents together with a power of future renewal.''
The lease hold property came to vest in the respondent, hereinafter to be referred to as `the BPT. The BPT was formerly governed under the Bombay Port Trust Act, 1879. The Major Port Trust Act, 1963 (MPT Act) was an enactment to make provision for the regulation of the working of major ports in India and it was applied to the BPT as from 1st February, 1975. In relation to debts, obligations and liabilities incurred on contracts entered into etc. section 29(1) of the MPT Act provided thus:-
'As from the appointed day in relation to any port-
(b) all debts, obligations and liabilities incurred, all contracts entered into and all matters and things engaged to be done, by, with or for the Central Government or as the case may be, the other authority immediately before such day, for or in connection with the purposes of the port, shall be deemed to have been incurred, entered into and engaged to be done by, with or for the Board''.
Exh. C. was in force for a period of 99 years and before the expiry of the said term, the petitioners applied for renewal by a communication dated 16th December, 1977. The sought for renewal was to be for a further period of 99 years. The BPT replied through its legal adviser on 5th June, 1978 suggesting that it would be better to have, a composite lease as the plots comprising the demised property were in close proximity to each other. Further correspondence ensued and on 22nd May, 1984, the BPT addressed a refusal to the petitioners. The refusal conveyed to the petitioners the BPT's decision that it had decided not to renew the above lease and that the existence of the renewal clause in Exh. C did not obligate the BPT to renew the same. As was to be expected, the petitioners were agitated at the refusal and came out with suitable protests on 19th June, 1984 and 13th November, 1984. These communications were not described as being a notice under section 120 of the MPT Act. The BPT was intimated by notice dated 11th May, 1984 that unless it changed its decision, the petitioners would be filing a suit for specific performance. The BPT on 19th October 1984 gave out another reason for justifying its refusal to renew the lease by pointing out that the Trust had no privity of contract with the BPT to invoke the renewal clause. Section 120 of the MPT Act is to the following effect:-
'No suit or other proceeding shall be commenced against a Board or any member or employee thereof for anything done, or purporting to have been done, in pursuance of this Act until the expiration of one month after notice in writing has been given to the Board or him stating the cause of action, or after six months after the accrual of the cause of action.''
The notice not having had any effect, the petitioners moved the instant petition on 19th December, 1984. The petition came up for admission before a learned Single Judge of this Court and he on 18th January, 1985 rejected the same, his reasons being -
'By this writ petition, the petitioners are seeking to enforce the specific performance of the contract of lease. The remedy of the petitioners is by way of a suit and not by a writ under Article 226 of the Constitution. Section 34 of the MPT Act on which Mr. Hidayatullah relied casts no obligation on the respondents to grant or renew the lease.
By an appeal to the Division Bench the petitioners impugned the rejection vide Appeal No. 204 of 1085. The Division Bench on 12th August, 1987 aside the rejection and some of the reasons given by the said Bench need to be reproduced. They are so reproduced below:-
The respondents are a public body. They are expected to act reasonably. Their refusal to honour the renewal clause in the lease without assigning any reason is, prima facie, arbitrary. Their conduct is such that the petition should be admitted.
To oppose the admission of the appeal the respondents had filed an affidavit. They contended that no suit could have been filed at the time when the petition was filed because of the special period of limitation prescribed under the MPT Act. They contended that section 34 of the said Act prohibited the respondents from entering into any lease for a term exceeding 30 years unless the same had been previously approved by the Central Government. They also contended that the respondents had, through the Central Government, requested the State Government to initiate proceedings to acquire the lease land.
There is no rigid rule that a writ petition should not be entertained after the special period prescribed in a special Act for the institution of the suit is over. It will be for the Court at the hearing of the petition to consider the aspect of laches. Section 34 only requires the permission of the Central Government to be taken. This does not mean that the respondents can decline to forward to the Central Government an application to renew a lease under a clause which obliges them to renew the lease. The respondents own the leased land. All, then, that can be acquired is the lease-hold interest of the lessees. The respondents appear, prima facie, to be attempting to circumvent the process of acquisition by declining to grant the lease.''
The appeal was allowed and the matter came back to the Single Judge.
3. Petitioners contend that the refusal to renew the lease is a violation of a contractual as also statutory responsibility cast upon the BPT. Being a public body, in fact an instrumentality of the State, the BPT is not at liberty to act irrationally. The reasons given by it for not renewing the lease cannot stand scrutiny if judged by the above standard. Sections 32 and 34 do not justify the refusal of the BPT. Section 120 of the MPT Act upon which reliance has been placed by the BPT has no application to writ petitions. The BPT be directed to withdraw the refusal and perform its obligation in terms of the renewal clause in Exh. C.
4. The BPT in its return contends that the claim made in the writ petition is a simple one for specific performance of a contract. The limitation for enforcing such a claim is governed by section 120 of the MPT Act. Having allowed the limitation prescribed by that section to expire, the petitioners, cannot now seek the assistance of a writ Court, to enforce a contractual right governed by the MPT Act. Next, the petition gives rise to questions that cannot be resolved within the confines of proceedings under Article 226 of the Constitution. Respondent desires to raise various defences and the establishment of the said defence are not possible within the para-meters of a writ petition. In other words, having regard to the reliefs sought in the petition by the petitioners, the appropriate medium to be adopted by them was a suit instituted before a competent Civil Court. On merits, section 34 was a letter upon the powers of the BPT to comply with the demand for renewal made by the petitioners. The 2nd proviso to section 34 requires the previous assent of the Central Government to renew a contract like the one incorporated in Exh.C. The Central Government was not a party to this petition and it could not be taken for granted that the required previous approval would be forthcoming. In 1980, the Trustees who looked after the affairs of the BPT passed a resolution recommending the acquisition of the leasees, interest in the land figuring in this petition. The resolution was forwarded to the Central Government for appropriate action and the said Government had written to the State Government in 1983 to initiate proceedings for the purpose of acquisition. This was in pursuance of the powers conferred upon the BPT vide section 32 of the MPT Act. Having taken steps to acquire the lessees' interest in the land, BPT had declined to comply with the request for renewal made by the lessees. A decision in regard to the interest of a public body having been taken, the BPT could not be expected to comply with the demand made upon it by the petitioners. For all these reasons the petition deserves to be dismissed with costs.
5. Counsel for the parties have been heard at great length. The first question to which I deem it necessary to address myself is the effect of the appellate decision vis-a-vis the points that arise in this petition. At one stage I was of the impression that some, if not all, major defences raised by the BPT were shut out by the order passed in appeal. Having deliberated at length over the matter, I have undergone a change of mind. The observations made by the Court of appeal are tentative and made only to the extent of ruling upon the admissibility of the petition. They cannot be read as having decided any contention other than the admissibility of the petition. Therefore, all the defences raised by the BPT will have to be considered on merits.
6. Petitioners contend that no reasons were given by the BPT for the refusal to renew the lease until it filed its affidavit in the Court of appeal. True as this may be, the inference will not be that the 1980 resolution spoken of in the return of the BPT is a myth or that it has been passed simply to negative the eligibility of the petitioners to get a renewal of the lease in terms of the renewal clause in Exh.C. The return speaks of a resolution passed in 1980. The date of the said resolution has been given and the return is sworn by a Principal Officer of the BPT. The BPT has approached the Central Government with a request to initiate proceedings for the acquisition of the lessees, interest. This approach was made in the year 1981. The Central Government in turn has moved the State Government to initiate proceedings under the Land Acquisition Act. That the State Government has done nothing till now is no reason for doubting the bona fides of the BPT. On its own the BPT could not have acted for section 34 of the MPT Act obliges it to acquire property only through the Central Government. It was argued that if the BPT had decided to acquire the lessees' interest, it would not have in the early stages of the correspondence shown a willingness to comply with the demand for renewal of the lease. This would not be the first time that a public body illustrated that its left hand does not know what the right is doing. Noting further need be said on this subject, except that the BPT would have been better advised had it disclosed the real reason for its refusal to comply with the request made by the petitioners, before the latter came to Court, The delay however is not of any consequence and I therefore proceed to the consideration of the next contention.
7. Petitioners contend that even if the BPT had decided to acquire the petition land that cannot be a reason for its declining to honour the commitment made by it vide Exh.C and the statutory obligation cast upon it under section 29(1)(b) of the MPT Act. That petitioners are the successors to the lessees, rights under Exh.C and therefore can enforce the obligation cast upon the lessor is indisputable. The contractual obligation stands clarified by section 129(1)(b). According to the BPT, it does not want to honour the commitment having regard to the decision taken in the year 1980. This response of the BPT is described as irrational and immoral by the learned Counsel representing the petitioners. In support of the alleged irrationality, reliance is placed upon the principle enunciated by Lord Selbourne, the Lord Chancellor in Lindsay Petroleum Co. v. Hurd (1874) L.R. 5 P.C. 221 . The Principle has been cited with approval by the Supreme Court in the Moon Mills Ltd. v. M.R. Meher, 69 Bom. L.R. 594 and is worded thus:-
'Now the doctrine of the laches in courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of those cases, lapse of time and delay are most material. But in every case, if an agreement against relief, which otherwise would be just, is founded upon mere delay that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.'
This Principle will also required to be considered when appraising the point of laches and limitation. Presently it has to be taken into consideration for considering the limited question as to whether the refusal of the BPT is arbitrary or an instance of immorality not expected of an instrumentality of the State. Petitioners also rely upon an observation made by the Supreme Court in the (Lotus Hotel's) case, reported in : AIR1983SC848 . The following passage from the judgment is pressed with great vigour by Mr. Taleyarkhan:-
'Viewing the matter from a slightly different angle altogether, it would appear that the appellant is acting in a very unreasonable manner. It is not in dispute that the appellant is an instrumentality of the Government and would 'be' other authority under Article 12 of the Constitution ...... the rule inhibiting arbitrary action by the Government would equally apply where such corporation dealing with the public whether by way of giving jobs or entering into contracts or otherwise and it cannot act arbitrarily and its action must be in conformity with some principle which meets the test of reason and relevance.'
The BPT has not phrased its refusal in these words, but the reason plainly is a desire to avoid payment of higher quantum of compensation which would become unavoidable in the event of petitioners being in the position of lessees who had secured a further renewal clause. The quantum of compensation payable to it in the above event would be far more than that payable by the BPT where the petitioners are left in the position of lessees holding over. Can this be described as immoral, irrational or arbitrary. It is all very well to expect public bodies to behave rationally and honestly. But I do not see what crime a public body commits by trying to minimise the losses likely to be sustained by it, if it can legitimately do so. By refusing to renew the lease, the BPT is taking a step which protects it from a liability more onerous than that under which it presently is, in the event of the lessees' interest being acquired pursuant to the request made to the State Government for the acquisition of the lessees' interest. Public bodies are not expected to so act as to benefit their counterparts in any contractual or statutory arrangement. They represent the interest of the public and the minimum that is expected from a public servant or public bodies, is, that they take the public interest into consideration and not confer unexpected or even avoidable benefits upon those who deal with it. In trying to minimise compensation which it would be required to pay, the BPT is doing no more than what is expected from a public body. Therefore, even if it be under a contractual or statutory obligation, it can take pre-emptive action to avoid the incurring of an unnecessary liability.
8. Next comes the question of limitation. Section 120 of the MPT Act does not apply to writ petition and to that effect is the decision of the Supreme Court in Sudama Devi v. Commissioner, Gorakhpur, 54. Comp. Cas. 273. But this does not mean that the question of limitation is to be ignored. In fact in another decision which has been relied upon by Mr. Taleyarkhan, it has been made clear that where raised, it has to be considered. The decision relied upon is Madras Port Trust v. Hymanshu International, : 1979(4)ELT396(SC) . In that case the Supreme Court expressed its disapproval of the Government of public authorities pleading limitation as a defence to a genuine claim advanced by a citizen. The exact words used are us under :-
'The plea of limitation based on this section is one which the Court always looks upon with disfavour and it is unfortunate that a public authority like the Port Trust should, in all morality and justice, take up such a plea to defeat a just claim of the citizen. It is high time that Governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens.'
But these observations are followed by the following which make the legal position clear:
'Of course, if a Government or a public authority takes up a technical plea, the Court has to decide it and if the plea is well-founded, it has to be upheld by the Court, but what we feel is that such a plea should not ordinarily be taken up by a Government or a public authority, unless of course the claim is not well- founded and by reason of delay in filing it, the evidence for the purpose of resisting such a claim has become unavailable.'
In the present case the statutory notice was given by the petitioners on 11th May, 1984. A suit was threatened in that notice. Section 120 requires that the suit be filed within six months of the accrual of the cause of action. Having failed to file the said suit within the statutory period, the petitioners could not circumvent the statutory bar of limitation by taking recourse to the old theory that a writ petition could be filed at any time provided some plausible excuses can be put forth to explain the omission to approach a statutory Court within the period of limitation. The case relied upon by Mr. Taleyarkhan does not say that the law of limitation stands repealed so far as actions against Government and public bodies are concerned. Neither does it say that the defence of limitation is not open to Government or public bodies in all cases. The observations relied upon by Mr. Taleyarkhan have to be read in the proper context. The Supreme Court had before it an appeal under Article 136 of the Constitution. Such appeals are admitted rarely. The only question raised by the appellant was that in regard to limitation. The morality and justice of the case was such, as to lead the court to express its surprise that the matter should have come up before it at the instance of a public body and that, under Article 136 of the Constitution. It was for this reason and nothing else, that the special leave was revoked. What was said in special circumstances cannot be deduced to be a ratio applicable whenever the plea of limitation is raised by the Government or a public body. Here the plea cannot be said to be frivolous. After all by notice dated 11th May, 1984, the petitioners had made known their determination to sue the BPT in Civil Court. Section 120 of the MPT Act enjoined upon them to institute the threatened suit within six months of the accrual of the cause of action. Having wilfully failed to institute the suit within the dead-line the petitioners cannot now come forth with the argument that the bar of limitation should be ignored because the BPT has not suffered any injury. The BPT does suffer an injury by being made to grant a relief at the hands of a writ Court which relief it could very legitimately refuse in a Civil Court on the preliminary ground of limitation. Litigants cannot be allowed to make a virtue of their own lapses, merely because the opposite party happens to be a Government or a public body, if honesty and morality are to be the guiding posts for Government and public bodies, the least that can be expected from private citizens is that they come forth with their claims in good time. at least, when they threaten to do so by giving statutory notices and within the prescribed period of limitation. The remedy of a writ petition is certainly not available to those who wilfully choose not to prosecute their claims before a Civil Court or statutory Court within the prescribed period of limitation. Going back to Lord Selbourne's observations, the passage makes it clear that delay to be a weighable factor, must not be such as to operate as a bar by any statute of limitation. True there is no period of limitation prescribed for a writ petition. But as said earlier, a writ Court will reach out and give relief only where morality and honesty so require and this morality and honesty is not to be at the cost of giving a go-bye to the statute at the mere whim of the suitor. Reliance is placed upon the decision of a single Judge of this Court in Dunlop Rubber Co., (India) Ltd. v. M. V. Raghawan Iyer, reported in 1983 E.L. T. 2289(Bom). Says the learned Judge:---
'In the matter before me, delay on the part of the petitioner is undeniable. However, no prejudice whatsoever has been caused to the respondents nor was it contended, and rightly so, that any prejudice has been caused, If at all, prejudice has been caused the petitioner which was kept out of a large amount of money by reason of the patently unsustainable order passed by the 1st respondent after a gross delay of nearly 3 years. I have not heard it said or read it laid down that a manifestly erroneous, unjust and unsustainable order which has caused no prejudice to the side seeking to sustain it, should be perpetuated only on the ground of laches to the detriment of the party against whom it is passed. The respondents are least qualified to urge laches and limitation when the 1st respondent himself took nearly 3 years before passing his order and that too with utter non-application of mind.'
Now there the blameworthy party was not the petitioner. In fact it was the 1st respondent who had taken his own time to pass an order. Here, a protracted correspondence beginning from 1977 preceded the giving of the statutory notice. By the time the statutory notice came to be given, the petitioners could not have been under any illusion about the disinclination of the BPT to accede to its request for granting a renewal of the lease. In the face of this attitude petitioners had no reason to delay the filing of the instant petition, assuming that it was not necessary for them to go to a Civil Court. Yet they waited for the statutory period to expire. Having been hauled up before the writ Court, the BPT has been prejudiced. Not having been taken up before a Civil Court within the statutory period, it legitimately assumed or at least could assume that the danger of facing a litigation had passed. Far from that being over, the BPT finds itself before a writ Court and that is a prejudice to the said body. The non-filing of a suit within the statutory period conferred on the BPT an advantage and the loss of that advantage by the device of a writ petition, amounts to a prejudice. Therefore, the circumstances of the case are such as to justify the plea of the BPT that this is not an appropriate case for grant of a discretionary relief.
9. The BPT relies upon section 34 of the MPT to contend that the reliefs claimed by the petitioners cannot be granted. The Central Government is not a party to this petition. It is true that the second proviso to section 34 requires the previous approval of the Central Government to enable the grant of the relief claimed by the petitioners in this petition. Even so, the relief claimed by the petitioners could have been modified to require the BPT to approach the Central Government for the requisite approval. The mere possibility of the Central Government not acceding to the request for renewal would not be an impediment in the way of the granting the petitioners such relief as could be otherwise granted to them.
10. Last, there is the contention that the petitioners should have been compelled to move a Civil Court and their not having done so disables them from getting any relief at the hands of a writ Court. Mr. Makhija points to the many defences which are available to the BPT and submits that these require an investigation unto the disputed facts which dispute cannot be gone into within the confines of proceedings under Article 226 of the Constitution. The reply given is that there are no disputed facts and that the petition revolves entirely upon a determination of questions of law. It is not possible to agree with the petitioners' reply. In substance, the petitioners are seeking the relief of specific performance and that is a discretionary relief. Even a Civil Court does not grant the relief of specific performance merely because it is legal to do so. Various aspects have to be considered and here the vital factor of public interest cannot be loss sight of. The BPT has initiated moves for the acquisition of the lessees interest and to what extent that would come in the way of the petitioners' rights flowing from the renewability clause, fortified by section 29(1)(b), requires an investigation. The investigation will have to go into the facts and there parties will take different stands. The resolution of these differences is not possible in a proceeding under Article 226 of the Constitution. Therefore, his defence has also to be sustained .
11. The result of the foregoing discussion is that the petition fails and the same is hereby dismissed. Rule discharged, with parties being left to bear their own costs.
12. A request is made for the continuance of the interim relief which is to the effect that the respondent should not take any action to evict the petitioners. It is not as if the BPT is going to take law unto its own hands and physically evict the petitioners. They will proceed according to the law and that is a sufficient protection to the petitioners against any improper action on the part of the BPT. The request for continuance of interim relief is negatived.